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New Zealand-USA
Tax Treaty Cuts Withholding Taxes
Dec. 2, 2008. Some withholding tax rates will be cut next year under a new
tax treaty between New Zealand and the United States that is due to be
signed in Washington.
For dividends the non-resident
withholding tax is currently 15 per cent, although under New Zealand’s
complex foreign investor tax credit regime it is effectively zero so long as
the dividend is fully imputed.
Under the revised double tax
agreement the rate for portfolio investors, who own less than 10 per cent of
a company in the other country, remains at 15 per cent. But for holdings
from 10 to 80 per cent it drops to 5 per cent, and for holdings above 80 per
cent it is zero.
This matches the US-Australian
agreement.
For interest payments the current
10 per cent rate continues generally but it will be zero for interest
received by a lending or finance business which is unrelated to the interest
payer - provided that in the case of interest sourced in New Zealand the 2
per cent approved issuer levy is paid.
For royalties the NRWT drops from
10 per cent to 5 per cent.
Source: http://www.nzherald.co.nz
December 2, 2008
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